The Organization of the Petroleum Exporting Countries on Tuesday said it was leaving its economic forecasts and its estimates of 2022 crude-oil demand growth supply growth and the global economy “under assessment” as it warned that inflation stoked by the Russia-Ukraine war could undercut oil consumption.
In its monthly report, the cartel said the conflict in Eastern Europe added more downside risk to the world economic outlook in 2022. Alongside issues tied to the COVID-19 pandemic, including rising commodity prices, the fighting is contributing to rising global inflation.
“The effects of the conflict, especially the impact of rising inflation, if sustained, will lead to a decline in consumption and investments to varying degrees,” the report said.
Citing those concerns and “extremely high uncertainty” around global macroeconomic performance, “the 2022 forecast for global oil demand growth remains under assessment at 4.2 [million barrels a day], OPEC said. Growth in countries that are members of the Organization of Economic Cooperation and Development, a club of mostly wealthy nations, stands at 1.9 mb/d, with growth for non-OECD countries at 2.3 mb/d.
The forecast, however, is subject to change in coming weeks, when there is more clarity on the far-reaching impact of the geopolitical crisis, OPEC said.
The estimate of demand growth in 2021 was nudged up by 50,000 barrels a day.
The outlook for non-OPEC supply in 2022 remained at 3 mb/d, year-over-year, but also under assessment, OPEC said, and will be reviewed and adjusted in comign weeks if necessary.
The main drivers of liquids supply growth are expected to be the U.S. and Russia, followed by Canada, Brazil, Kazakhstan, Guyana and Norway, the report said.
Oil futures remained lower, having fallen sharply ahead of the report Tuesday. West Texas Intermediate crude
the U.S. benchmark, was down 7% at $95.89 a barrel on the New York Mercantile Exchange after hitting a 14-year high above $130 a barrel last week.
the global benchmark, was down 6.5% at $99.99 a barrel.